Meta’s stocks have taken a serious beating lately, with its price shedding more than 13 percent over the past month. That fact isn’t likely to ease pressure in the trillion-dollar megacorp’s board room, as tensions between CEO Mark Zuckerberg and his board of directors reach a boiling point.
As the Wall Street Journal phrased it in new reporting, the conflict between Zuckerberg and his board have amounted to a “war over power and money.” Over the past few months, the paper reports, Zuckerberg has demanded a massive stock-heavy pay raise from Meta’s directorate, forcing an impasse so fraught that numerous board members have threatened to resign if the CEO doesn’t back down.
According to documents viewed by the WSJ, a negotiation team made up of three members of the board began preparing a contingency plan in early September, to use in the event that Zuckerberg refused to back down from his compensation demands. That standby plan reportedly included “resignation from the board” by the negotiation team as a last resort.
Though the squabble is playing out over Zuckerberg’s salary, the source of the conflict traces back to the CEO’s rampant spending on AI.
Per the WSJ, the whole remuneration debate was triggered by Meta’s out-of-control AI spending, which dragged the corporation into a negative free cash flow of $2.12 billion in the third quarter of 2026 — the first time the company has fallen into the red since 2012.
“More spending, negative free cash flow, not enough revenue being generated from the spend [is] concerning investors that this is just sort of a bit of a money pit,” as senior portfolio manager at Dakota Wealth Robert Pavlik told Reuters in an interview.
In an October 2025 investor meeting, Zuckerberg reportedly said his aggressive gamble on the AI-front was a necessary risk for Meta, despite simultaneously acknowledging that the hyperscale approach to AI had created a dangerous financial bubble.
“I think it’s the right strategy to aggressively front-load building capacity so that way we’re prepared for the most optimistic cases,” Zuckerberg told stockholders in 2025.
With Meta’s AI products failing security testing and automation implementation — to say nothing of the ongoing Muse safety debacle — it seems Zuckerberg’s AI ambitions are finally hitting the brick wall of financial reality.
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